Like many holidaying couples Paulina Krzysztoszek and her husband Morgan purchased travel insurance to cover their holiday of a lifetime to the Far East. They chose an insurer who provided a comprehensive policy that seemed to meet their needs. Baggage loss was covered, theft, and medical expenses all standard stuff for a holiday insurance policy . Reassured that they had done the right thing they set off on their holidays in the comfort that should something go wrong they had the backing of a seemingly reputable insurer. Unfortunately for Morgan, upon arrival in Singapore he developed problems breathing and was admitted to hospital on the 31st May 2017 with a life threatening condition. Paulina contacted their insurers, certain that they would pick up the tab for the medical bills.   However, they refused to pay out citing an exclusion that they don’t have to pay for any medical condition related to a pre-existing problem.  


So, what can you do when an insurer refuses to pay up?

Insurance contracts are not ordinary contracts. In many situations, you have no choice over whether to purchase the cover or not. Motor insurance, employers’ liability insurance and professional indemnity policies are all compulsory. If you want to drive a car, you must be insured. If you employ staff, you must be insured. Undertake certain professions, you must be insured. Given that you must buy these policies, don’t you want to have the comfort of knowing they will pay out when you make a claim?

One of the definitions of an insurance contract is that it is a list of exclusion clauses. As a header, it might say what is covered (which is great), but then list any exclusions. Take Morgans situation for example. The policy clearly says there is cover for sickness whilst on holiday. It’s only when you look at the “small print” that you see they exclude any condition where you have a pre-existing problem.

When buying an insurance policy, you must read the small print to ensure that you understand what it is they are providing. Most people are influenced by cost alone. A cheap policy might not however provide the scope of cover for your needs. Take motor insurance for example. You can get a cheaper policy if you agree to pay a higher excess on any claim. Great, but can you really afford to pay £1000.00 if you have a claim?

The other point about insurance is this – you must be honest with your insurers. One of the reasons insurance contracts are unlike any other contract is that there is a positive duty to tell insurers relevant information whether asked by them on the proposal form or not. This is called a “duty of utmost good faith.” Frequently, insurers will refuse to pay out because they say you should have volunteered information to them when you bought the policy. This happens a lot with motor insurance policies. You might be tempted not to tell the insurer about your claims history or convictions since by doing so they will quote a lot lower premium. Unfortunately, when you go to make a claim you will be asked these questions again and almost certainly asked to provide a copy of your licence.  This is when the truth will out and your insurers can refuse to pay.

If the worst happens and your insurers do refuse to pay, you can challenge their decision. The starting point is to ask for an explanation in writing. If you do not agree with what they say you should invoke the insurers complaints procedures. All insurers must have a complaints handling process. If you still can’t get satisfaction, then your complaint can be escalated to the Financial Ombudsman Service (FOS). This service is free of charge and not only does the FOS look at what the policy actually says and the law, They also consider what best market practice should be. In short, they champion the consumer.  That isn’t however the end of your case if the FOS does not side with you. If you don’t agree with them you can still take your case to Court and have a judge decide.

Paulina and Morgans dispute with their insurers is still ongoing. Morgan remains in a Singapore hospital where by the end of August 2017 the medical bills had reached nearly £120,00.00. Flying Morgan back home by air ambulance will cost up to £48,000.00 more.  Both Paulina and Morgan are having to contend both with his life threatening illness and the prospect of financial ruin. Whilst their fight to get the insurers to pay up continues, they have launched a fund raising campaign to help cover some of the expenses and more importantly evacuate Morgan back to the UK.

If you would like to contribute to Paulina and Morgans campaign, then the link to their page is